A supply agreement is a document used in a purchase between a vendor/supplier and a buyer. The document contains terms and conditions regarding the purchase outlining each party's obligations in the transaction and effective dates of the life of the transaction. The agreement may include terms like a party's rights to termination of the agreement, what actions constitute breach of contract, as well as the repercussions if either party breaches the agreement.
Complex agreements for consumer products may include indemnification for loss, legal actions, damage, and liabilities, as well as conflict of interest statements. An agreement may contain an estimated timetable of delivery of the supplier's products, as well as a confidentiality clause, site of delivery, and any information regarding the price of goods.
If a supplier is offering a discounted rate for purchase to the buyer, the supply agreement typically includes information on the reduced rates. Payment sections of an agreement can include conditions of payment, interest and penalties if payment is late, due dates and other related information.